Five green policies on the way – and how they could affect your business

Many green policies have been delayed by other priorities, but we’re expecting to see more soon.

As the UK begins to recover from lockdown, climate experts have said that this is our chance to rebuild the economy on greener lines. As the government works to kickstart economic activity again, it will have to consider the long-term environmental impact of its decisions and how they fit with the UK’s climate targets.

Frustratingly, many green policies have been delayed by competing priorities – notably Brexit, a general election and a global pandemic in the last two years alone. This includes the long-awaited Energy White Paper, which was finally published in December 2020 and sets out how the UK will clean up its energy system to reach net zero.

Ahead of COP26, we’re expecting to see more promised (and overdue) green policies coming soon. Here we outline some of the big ones – and what they could mean for your business.

Net zero strategy

What is it? A plan for how to meet our legally binding target of net zero greenhouse gas emissions by 2050.

What will it involve? The government says that the strategy will set out its vision for “transitioning to a net zero economy, making the most of new growth and employment opportunities across the UK.”

Last year the Climate Change Committee (CCC) published a set of policy recommendations to rebuild the UK economy on a greener trajectory as we recover from COVID.  If the government uses these practical and time-specific recommendations as the basis for its net-zero strategy, it might include:

  • More spending on hydrogen storage and transport infrastructure
  • Serious spending on energy efficiency for buildings and the transition to heat pumps
  • More support for renewable energy generation
  • More support for electric vehicles.

Further into the future, we should not discount changes to the rules on energy and carbon reporting for large businesses. If your business falls under the scope of the Energy Savings Opportunity Scheme (ESOS) and/or the Streamlined Energy and Carbon Reporting (SECR) rules, it’s a good idea to prepare for the possibility that the requirements will become more stringent in future phases of the schemes. 

When is the Net Zero Strategy due? No exact date has been given, but they intend to publish it in the lead-up to COP26, the UN climate conference which will take place in Glasgow in November.

Heat & Buildings Strategy

What is it? A strategy setting out the immediate actions the government will take for reducing emissions from buildings.

What will it involve? It has been described in the House of Lords as enabling “the mass transition to low-carbon heat”. The CCC’s Sixth Carbon Budget report, published in December 2020, says that progress in delivering reductions of buildings emissions has “flatlined” since 2015, yet we need to reduce emissions from buildings to zero by 2050.

The Sixth Carbon Budget recommends that we end the sale of gas boilers in 2033 for domestic properties and between 2030 and 2033 for commercial properties. Alternatives could include green gas, hydrogen or electric heating, and the government seems to be exploring all these options.

In the meantime, there is likely to be a focus on energy efficiency as the quickest way to cut emissions from buildings. Along with upgrading the UK’s housing stock (among the oldest and draughtiest in Europe), this will probably involve higher standards for commercial buildings. A stricter version of the minimum energy efficiency standards (MEES) is expected in 2023, but it is possible that this will be brought forward. 

When is the Heat & Buildings Strategy due? It was originally due by the end of 2020, but is now promised for “early 2021”.

Transport Decarbonisation Plan

What is it? A plan for drastically reducing greenhouse gas emissions from the transport sector.

What will it involve? Surface transport is currently the UK’s largest source of greenhouse gas emissions, so getting this sector in line with our net zero target is both urgent and extremely challenging. It is likely that support for electric vehicles, including spending on charge point infrastructure, will continue to be a priority.

Rail may also be a focus. The government’s current goal is to remove all diesel-only trains by 2040, but this may be brought forward as part of a more ambitious plan to electrify the railways.

Other possible measures in the plan could include:

  • More investment in low-emission shipping fuels
  • A change to HGV charging that encourages more efficient journeys
  • Support for active travel so that more of us leave the car at home.

When is the Transport Decarbonisation Plan due? It should come out in spring 2021 – so any day now.

Hydrogen Strategy

What is it? A document setting out exactly how the UK will use hydrogen as a replacement for more emissions-heavy fuels.

What will it involve? The UK government sees hydrogen as an important clean energy source, and last year awarded millions of pounds to build Europe’s first ever low-carbon hydrogen plants. There are challenges: hydrogen can only be described as a low-carbon fuel when it is produced without fossil fuels, and support is needed to develop and commercialise the technology on a larger scale.

Last year’s Ten Point Plan for a Green Industrial Revolution gives us a good idea of what is likely to be in the strategy:

  • A target of 5GW hydrogen production capacity by 2030.
  • Blending of hydrogen into the gas grid. Current capacity is just 0.1%, and Good Energy would like to see it increased to at least 10%, to maximise hydrogen’s potential for heating our homes.
  • Investment in carbon capture and storage infrastructure to facilitate the production of low carbon hydrogen.
  • Trials of hydrogen heating. These will start out small but gradually increase in size, and there may be a pilot Hydrogen Town by the end of the decade.

When is the Hydrogen Strategy due? Some time in 2021, and there is pressure from various bodies to publish soon.

Environment Bill

What is it? Legislation intended as a post-Brexit replacement for EU laws on the environment. Touted by the government as “ambitious”, it sets out a clear direction of travel on its approach to domestic environmental policy.

What will it involve? Now that the transition period for the UK’s withdrawal from the EU is over, the environmental protections in EU law no longer apply to the UK. The Environment Bill was intended to replace those protections by enshrining them in UK law, so the original plan was to get it through Parliament before the end of the withdrawal period. It allows ministers to set national targets for key areas such as air pollution, water quality, biodiversity and waste (all previously covered by EU rules).

The Environment Bill also gives new powers to “national authorities” (the Secretary of State or ministers in the UK’s devolved administrations) so that they can enforce rules to protect the environment. Examples of environmental measures supported by the Environment Bill:

  • Financial penalties for emitting smoke in English smoke control areas
  • Recalling vehicles that don’t meet environmental standards
  • Charges for single-use plastic items
  • Electronic tracking of household waste
  • Compulsory deposit schemes for certain types of packaging, e.g. glass bottles.

When will the Environment Bill become law? The Bill had its second reading in Parliament in February 2020, but progress ground to a halt with the onset of the pandemic. Its return to Parliament has been delayed multiple times, and it seems unlikely that the Bill will pass before the autumn.

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